Despite the selling, yields on the 10-year bond have slipped to 1.88% Friday afternoon. Treasuries trade inversely so as the yields drop - the prices rise, which make it all the more odd that foreigners would be unloading treasuries at a time when their value is increasing. "Let's face it, a greater portion of the U.S. debt is held outside of this country than ever before," said Stephen Guilfoyle, an economist at Meridian Equity Partners. "That said, come year's end, I don't know how much of a surprise it should be that anyone, including foreigners would be liquidating assets. That goes especially for the cash strapped." The TIC report doesn't define which foreigners are selling, so it becomes a guessing game but the logical conclusion is the Chinese. They own $1.12 trillion, but they sold 3% of their holdings in August following the downgrade by the S&P. However, this hasn't been a logical year for trading, so the next guess is the Europeans. European banks are hoarding cash following European Central Bank's long-term refinancing operation last week. The latest ECB data showed 445 billion euros deposited in the central bank's overnight facility on Thursday, up from 436 billion euros the day before. U.S. treasuries remain in heavy demand with a sale on Dec. 20 drawing bids for a record 9.07 times the amount offered. And it's a good thing that demand is so strong because the U.S. debt will be within $100 billion of the government's limit by the end of Friday. The picture isn't expected to change anytime soon. Kathy Jones, fixed income strategist at Charles Schwab said in commentary on Friday: "We look for Treasury yields to remain low and the yield curve to remain steep in the second half of the year." Meridian Equity's Guilfoyle added: "The selling of U.S. debt by foreigners leaves us at a still very high level of foreign ownership historically. Now, if it was China, then we have to keep our eyes on it." -- Written by Debra Borchardt in New York. >To contact the writer of this article, click here: Debra Borchardt. >To follow the writer on Twitter, go to http://twitter.com/wallandbroad. >To submit a news tip, send an email to: email@example.com.